Glaxo's CEO to scoop 5.7 mln stg a year

Date

Class

16th Dec 2003

Questionable Business Practice

Details

LONDON, Dec 14 (Reuters) - Jean-Pierre Garnier, chief executive of GlaxoSmithKline Plc , will earn up to 5.7 million pounds ($9.96 million) a year under a new pay package agreed by the pharmaceuticals group, the Sunday Telegraph reported.

The deal would reinforce the U.S.-based chief executive's position as the highest-paid executive of a leading FTSE 100 company, although his fellow directors say his pay is in line with other drug group chief executives, the paper added.

The company confirmed it was in talks over the salaries of its top executives.

"We confirm that we are in the final stages of lengthy and detailed discussions with our major shareholders over the matter and will make an announcement shortly," said a group spokesman.

The paper said the company is braced for criticism from activist shareholders after the group was acutely embarrassed in May when a slim majority of shareholders voted against its remuneration policy.

Shareholders were then infuriated by Garner's two-year contract -- twice the British norm -- and the generosity of pension arrangements for him and his wife. Glaxo has since acted to cut Garnier's contract to one year and simplify his pension.

The paper added that Glaxo had sounded out the view of its largest institutional investors, and believed most of them would approve the new arrangements.

Garnier's basic salary will remain unchanged at around 1.5 million pounds but will be eligible for a cash bonus on top of his basis salary and also so-called performance shares and share options.

The paper said the new deal was agreed by the board on Friday, and details of the new remuneration arrangement for Glaxo's 15 most senior executives are likely to be published this coming week. ($1=.5723 Pound)